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Online Real Estate business models

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HotPads to show rent vs. buy home prices

hotpads-logo.jpgWith plummeting housing prices and rental rates going up (credit crunch victims need a place to live, after all), prospective home buyers face more confusion about whether it’s better to buy or rent a home.


Housing search engine and listing service HotPads.com thinks it has the answer to the conundrum: showing rental and mortgage rates side by side on the screen.


On Monday the Washington, D.C. company will launch the first “buy vs. rent” search feature in the industry. Select a city and a target location from the list on the left of your screen, and a map of the area comes up with a choice of a street, aerial or hybrid view. Then enter the amount you’re prepared to pay for a place per month. Hotpads then returns all the matching properties on a 3D map. Red homes are those for sale, and Hotpads shows only those you can afford with a mortgage payment in the range you selected, and yellow homes are for rent, and it will only show those with rental payments in the same range. See image below.


You can also tweak the amount you’re prepared to pay per month, with a slider. You can also change the loan terms you want for a purchase — size of down payment, length of mortgage and the interest rate you think you can get — and matching properties again pop up on a 3D map.


As you click on each property on the map, a bubble pops up showing pricing details. See image below.


This will be useful for some people. Even before the credit crunch shook things up, we knew several young professionals who were undecided about whether they should rent or buy. Obviously, short-term and long-term goals will and should factor into that decision, but for some, it boils down to a practical decision about how much they can afford, and this map lets them know what they’re really getting with buy vs. rent.


Launched in November of 2005 by Doug Pope and two other college roommates, the company says its site has 300,000 visitors a month. It kicked off with $200,000 in seed money from family, friends and the founders. In March, it raised $2.3 million in a first round of capital from Meakem Becker Venture Capital and the Investment Group of Santa Barbara. Pope expects to raise a larger round of venture capital next year.





Companies in online real estate




Silicon Valley classifieds start-up, Edgeio http://www.edgeio.com/, has acquired a company that will allow Edgeio’s users to search significant amounts of real estate data.


If you think that is trivial, think again. Online real estate listings face a regulatory mess — related to the legally complicated Multiple Listing Service (MLS) system. The end result is that a Web site must have a direct relationship with an agent or with a regional MLS in order to show detailed data on homes. This has stymied many real estate sites, such as Zillow and Trulia, from getting the data they want. In fact, the Department of Justice is suing the National Association of Realtors, saying it colluded to prevent listings from appearing online, giving established brokers an advantage. The DoJ claims online brokers can deliver services more efficiently at lower prices. But it says the NAR policy of allowing traditional brokers to block listings to online sites inhibits that new technology.


Edgeio seems to be doing an end run around this system, but legally. Chief executive Keith Teare told VentureBeat Wednesday it has acquired the assets of Adaptive Real Estate Services, a company built over the past several years by father and son team Robert and Peter Meyer — and which has patiently built up relationships with brokers and agents in 70 of the top MLS organizations — and equivalent to about 70 percent of the MLS network nationwide. It has about 1.5 million homes listed for sale in the areas it covers. This means Edgeio can show these 1.5 million homes in its search results, and let users drill down to see the data details hosted on Web sites it has relationships with. And going forward, other brokers and dealers can opt into Edgeio’s network.




My Currency Launches Crowd Based Home Valuations



My Currency is launching another take on the wisdom of the crowds, this time aimed at the real estate market. Unlike Zillow, My Currency derives its housing valuations from the marketplace of user opinions by having them assess properties as over or undervalued along with the strength of their conviction. For instance, if I feel a house in San Francisco for 11 million dollars is overpriced, I vote for what lower price I think is right as well as how strongly I feel that on a 1-10 scale. The conviction of my choice and the accuracy of my past votes play into how much I can affect the valuation and price trend of the home. Home listings are a bit sparse at the moment, and rely on self listing.


The hope is that experts and real estate agents will be drawn to the site and its users as a lead generation tool. Quality lead generation has been a problem for online realtors. Founder Karim Tahawi says that 2 out of 3 internet leads produce no sale. The site will allow realtors to make one on one contact to buyers by answering direct questions or attracting clients with their reputations. Experts will establish themselves by their voting records and distinguish themselves as the best at valuing different cities or neighborhoods.


Why be honest in your valuation? My Currency answers this through a reputation score that consists of your past performance valuing homes, contributions to the site, and popularity of your additions. These all play a part in the formula that weights your vote on a property. Contributions are measured on the volume of contributions to the supporting blog, wiki, and Q&A pages. Users that produce more frequently viewed content or selected answers, will have higher popularity scores.


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